Breaking Down Lottery.com Inc. (LTRY) Financial Health: Key Insights for Investors

You're looking at Lottery.com Inc. (LTRY) and seeing a stock that's down 74.59% month-to-date, and honestly, you need to know if this is a deep-value play or a value trap. The Q3 2025 earnings report, released in November, paints a complex picture: revenue fell sharply by 31.4% year-over-year to just $0.137679 million-that's a serious drop-but the net loss actually narrowed by 42.9% to $4.61 million, which is a defintely positive sign of cost control. Here's the quick math: the company is aggressively pivoting from a lottery courier service to a broader Sports, Entertainment, and Gaming (SEGG Media) platform, but this high-stakes shift comes with a massive accumulated deficit of $275.4 million and an explicit 'going concern' warning, which is financial-speak for significant doubt about their ability to stay in business over the next year. So, the question isn't just about the $1.19 loss per share; it's about whether their $30.5 million in new intangible assets from acquisitions will generate revenue fast enough to outrun their negative $6.4 million in cash used in operating activities for the nine months ended September 30, 2025. Let's break down what that means for your investment decision.

Revenue Analysis

You're looking at Lottery.com Inc. (LTRY) and seeing a company in the middle of a massive, two-year turnaround, so the revenue picture is volatile but tells a clear story of strategic shift. The direct takeaway is that while top-line revenue is still shrinking from legacy operations, management is aggressively diversifying the streams through new acquisitions and the launch of the Sports.com platform. You need to focus less on the historical decline and more on the new revenue sources that are just starting to kick in.

For the first quarter of fiscal 2025, the company reported sales of just over $223,850, a continuation of a challenging trend. Here's the quick math: that Q1 2025 figure was a 13.7% decrease from the $259,320 reported in the same quarter of 2024. Looking at a broader picture, a report released in April 2025 showed revenue at approximately $1.07 million, which was a steep 84.75% drop from the prior year's $6.99 million. That kind of year-over-year revenue loss is defintely a flashing red light, but it's largely a reflection of the company cleaning up and scaling down its problematic, older subsidiaries like TinBu and Global Gaming.

The core of the revenue story now is diversification beyond the original digital lottery model. The company's primary revenue sources are rapidly changing as the 'buy-and-build' strategy takes hold. The new revenue streams are coming from:

• Lottery.com Operations: The traditional, core digital lottery services, which have been the main source but are currently declining.
• Sports.com Platform: A major new focus, generating revenue through a new advertising and sponsorship model, capitalizing on its strong domain name and sports content.
• Entertainment/Ticketing: Revenue from the acquisition of DotCom Ventures, which includes assets like Concerts.com and TicketStub.com, pushing the company into live events.
• International Expansion: New revenue generation from international lottery operations, which were anticipated to start contributing by the end of March 2025.

Honesty, the biggest change in the revenue mix is the introduction of non-lottery revenue. The decline in the legacy revenue from subsidiaries was partially offset by new revenue from the S&M&I subsidiary, which is tied to the Sports.com launch. This shift is crucial because it means the company is no longer a pure-play lottery business.

What this estimate hides is the true segment contribution. We don't have a clean percentage split yet for 2025, but the strategic intent is clear: to have Lottery.com and Sports.com become the dual core assets, with the latter adding a high-margin advertising and media component. The company secured $250 million in committed funding to fuel this aggressive expansion, so you should expect the segment contributions to look drastically different in the next few quarters as these new businesses scale up.

Here's a snapshot of the recent performance data:

The sharp drop in gross profit, even with a smaller revenue decline, shows that the cost of revenue nearly doubled, hitting $162,000 in Q1 2025, which is a key operational pressure point to watch. If you want a deeper dive into who is betting on this turnaround, check out Exploring Lottery.com Inc. (LTRY) Investor Profile: Who's Buying and Why?

Next Step: Finance: Model the revenue contribution of the Sports.com advertising segment based on a 5% penetration rate of the estimated $250M funding's marketing budget by the end of Q4 2025.

Profitability Metrics

If you're looking at Lottery.com Inc. (LTRY), the profitability picture is defintely challenging, and the numbers from the 2025 fiscal year tell a very clear story of a company in a high-cost operational pivot. The direct takeaway is that while the gross margin was initially positive, massive operating expenses and a collapse in Q3 revenue pushed the company deep into the red.

Let's look at the first quarter of 2025 (Q1 2025), which ended March 31, 2025. Lottery.com Inc. reported total revenue of only $223,850. The company managed a Gross Profit of $61,000, which translated to a Gross Profit Margin of approximately 27.25%. That margin, on its own, seems okay, but it's a far cry from the industry standard for digital platforms.

Here's the quick math on the bottom line: for that same quarter, the company posted a Net Loss of $3.3 million. This means the Net Profit Margin was a staggering -1,474.20%. The gap between that 27.25% Gross Margin and the massive net loss highlights a fundamental issue with operational efficiency, specifically the cost of running the business (operating expenses) far exceeding the revenue generated.

• Gross Margin (Q1 2025): 27.25%
• Net Profit Margin (Q1 2025): -1,474.20%

Trends and Operational Efficiency

The trend in profitability over 2025 shows a worsening operational environment, indicating the strategic pivot is burning cash faster than new revenue streams can compensate. By the third quarter of 2025 (Q3 2025), the Gross Profit actually flipped to a loss of $67,000, representing a 159% decrease from the prior year. This gross loss was driven by a 137% surge in the cost of revenue, suggesting a fundamental problem with the scalability and margin of their current revenue-generating activities like TinBu and Global Gaming. A negative gross profit means the company is losing money on the core product before even paying for rent, salaries, or marketing. That's a serious red flag.

The operational expenses are compounding the problem. In Q3 2025, General and Administrative (G&A) expenses soared 120% quarter-over-quarter to $1.5 million, fueled by costs like $375,000 in Sponsorships and $189,000 in Public Relations for the new media verticals. When you combine the $67,000 gross loss with a G&A expense of at least $1.5 million, the Operating Loss for the quarter is clearly substantial. This aggressive spending, while aimed at a strategic pivot to a Sports, Entertainment, and Gaming (SEGG Media) platform, resulted in Net Cash used in operating activities accelerating to $6.4 million for the first nine months of 2025. The accumulated deficit as of September 30, 2025, stood at $275.4 million. The company is in a high-stakes, high-cost race to find a profitable business model.

Industry Comparison: A Sobering Contrast

To put Lottery.com Inc.'s performance into perspective, you need to compare it to established players in the digital gaming and lottery space. The contrast is stark, highlighting how far the company is from sector norms. For a comparable digital marketing company in the online gambling sector, Gambling.com Group, the profitability ratios are vastly different, reflecting a successful, scalable digital model:

Even a state-run operation like the Pennsylvania Lottery, which has different cost structures, reported a Net Traditional Profit Margin of 23.32% for its fiscal year 2024-2025. The industry benchmark for a successful digital business is a near-perfect gross margin, like Gambling.com Group's 94.02%, because their core product is software and digital referrals. Lottery.com Inc.'s sub-30% gross margin in Q1 2025, and the subsequent gross loss in Q3 2025, suggests their business model, which involves lottery ticket sales or related services, is structurally low-margin and currently unsustainable due to ballooning operational costs. You can dive deeper into who is betting on this turnaround by Exploring Lottery.com Inc. (LTRY) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You're looking at Lottery.com Inc. (LTRY) and trying to figure out how they're fueling their aggressive turnaround. The short answer is: mostly through equity-linked financing, not traditional debt. This strategy keeps their core debt-to-equity ratio (D/E) low, which is a good sign for solvency, but it introduces a different kind of risk-dilution.

As of the first half of the 2025 fiscal year, Lottery.com Inc.'s balance sheet reflects a company in the middle of a major financial restructuring. While the firm's total liabilities stood at approximately $30.39 million as of May 2025, the actual debt component appears to be a small fraction of that, evidenced by a reported $2.9 million issuance of debt around the same time. To be fair, most of the liabilities likely consist of accounts payable and other operational accruals, not long-term bank loans.

Here's the quick math on their core leverage. Using the $53 million in total assets and $30.39 million in liabilities from the May 2025 timeframe, the estimated total equity is around $22.61 million. If we take the explicit debt figure, the Debt-to-Equity ratio is exceptionally low, sitting at roughly 0.13 ($2.9M debt / $22.61M equity). This is far below the generally healthy D/E benchmark of 1.0 to 1.5, and even lower than the 0.08 D/E ratio of a major industry peer like NetEase. A low D/E ratio defintely signals stability and a strong ability to take on debt if needed.

The real story isn't in the debt, but in the equity funding. The company secured a massive $300 million committed financing facility with Generating Alpha Ltd. in June 2025, which is an equity-linked Stock Purchase Agreement, not a traditional credit line. This facility is designed to fund their 'buy-and-build' strategy, including acquisitions like the $10 million acquisition of GXR World Sports Assets. The company has already drawn down $1.87 million from this facility for operational expenses and acquisitions. This is how they balance financing: minimal debt, maximum equity-linked capital for growth.

The table below summarizes the key financing components for Lottery.com Inc. in 2025, highlighting the shift away from traditional borrowing:

What this estimate hides is the potential for significant shareholder dilution as the $300 million facility is drawn down through stock purchases, which is the trade-off for avoiding high-interest debt. For a deeper dive into the company's full financial picture, including profitability and valuation, you should check out the full post: Breaking Down Lottery.com Inc. (LTRY) Financial Health: Key Insights for Investors.

Your action item here is clear: Monitor the quarterly reports for the rate of drawdown on that $300 million equity facility. Rapid drawdown means faster acquisitions, but also faster share dilution.

Liquidity and Solvency

You're looking at Lottery.com Inc. (LTRY) and its ability to cover its short-term bills, which is the heart of liquidity analysis. The direct takeaway is that while the company's operational liquidity ratios signal a precarious position, a massive capital infusion in 2025 has provided a critical financial lifeline.

For the trailing twelve months (TTM) leading up to the end of Q3 2025, Lottery.com Inc.'s liquidity ratios are a clear red flag. The Current Ratio sits at approximately 0.53. This means for every dollar of current liabilities (debt due within one year), the company only holds about $0.53 in current assets to cover it. That's a classic sign of near-term financial strain.

The Quick Ratio is also approximately 0.53. Since the Quick Ratio (a stricter measure that excludes less-liquid inventory) is the same as the Current Ratio, it tells you that inventory is negligible-which makes sense for a technology and services firm. The real concern is the Cash Ratio, which measures only cash and equivalents against current liabilities, and it is critically low at about 0.01. Simply put, they don't have much cash on hand to pay immediate obligations.

Working Capital and Near-Term Risk

This low Current Ratio directly translates to a negative working capital position. Working capital (Current Assets minus Current Liabilities) is the buffer a company uses for its day-to-day operations. When this is negative, it means current liabilities are significantly greater than current assets, forcing the company to constantly scramble for cash to meet obligations. Here's the quick math: with a ratio of 0.53, Current Liabilities are roughly 1.89 times Current Assets.

This negative trend, if not reversed by operational cash flow, can lead to a liquidity crisis. That's why the company's turnaround strategy is so important. You can dig into their strategic goals here: Mission Statement, Vision, & Core Values of Lottery.com Inc. (LTRY).

Cash Flow Dynamics and the $250M Lifeline

A look at the cash flow statement for the nine months ended September 30, 2025, shows the operational challenges. The net loss for this period was $11.9 million, which implies negative cash flow from operations, as the company is spending more than it earns. The Q3 2025 net loss alone was $4.61 million.

But here is the crucial counter-point, and it maps a clear action for investors: the Financing Cash Flow is the story of 2025. In April 2025, Lottery.com Inc. secured a massive $250 million in new funding, with $100 million from Generating Alpha Ltd. and $150 million from United Capital Investments London. This is a huge capital infusion designed to fund their growth strategy and, more importantly, shore up their financial structure. This financing activity is what keeps the lights on and funds the turnaround, despite the negative operating and investing cash flow trends.

• Operating Cash Flow: Likely negative, driven by a $11.9 million net loss for the first nine months of 2025.
• Investing Cash Flow: Focused on growth initiatives and technology build-out, likely a cash drain.
• Financing Cash Flow: A massive injection of $250 million in April 2025, providing immediate liquidity and a runway for the turnaround.

The risk is clear: the company is currently relying heavily on this new capital to survive and execute its strategy. The low liquidity ratios mean they defintely need to see a rapid and sustained shift to positive operating cash flow in the near term to avoid future capital raises or debt restructuring.

Valuation Analysis

You're looking at Lottery.com Inc. (LTRY), and the first question is always the same: is this stock priced fairly? The short answer is that traditional valuation metrics suggest the stock is overvalued relative to its current financial performance, but the market is pricing in massive, speculative future growth. It's a high-stakes bet, not a value play.

Here's the quick math: as of late 2025, the stock is trading around $5.00, but the volatility has been brutal. Over the last 12 months, the share price has swung from a low of about $0.220 to a high of $26.45, reflecting a chaotic year where the value still grew by an eye-popping 318.7% over the past year in one snapshot. That kind of swing tells you this stock moves on news and sentiment, not just fundamentals.

Core Valuation Metrics: Why LTRY is a Speculative Buy

When we look at the core valuation ratios, the picture is clear: Lottery.com Inc. is not profitable. This means the standard Price-to-Earnings (P/E) ratio is negative, which is a red flag for a mature company but common for a high-growth, pre-profit tech company. We have to look at other metrics to gauge the market's expectation.

What this estimate hides is the market's hope for a massive turnaround. The negative P/E and EV/EBITDA ratios are a reality check on current operations, but the high Price-to-Sales ratio suggests investors are willing to pay a huge premium for every dollar of revenue, expecting that revenue to explode.

• P/E Ratio (Price-to-Earnings): Approximately -0.58 (Negative). This means the company is currently losing money, so the ratio is technically meaningless for a valuation comparison.
• EV/EBITDA (Enterprise Value-to-EBITDA): Approximately -0.8x (Negative). This confirms the operational loss, as Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is negative.
• P/B Ratio (Price-to-Book): Approximately 0.2x (FY 2024). This is surprisingly low and could suggest the stock is undervalued based on its net asset value, but only if you trust the book value and ignore the major operational losses.
• P/S Ratio (Price-to-Sales): Approximately 23.74 (as of early 2025). This is defintely high for a company with declining revenue, signaling a strong belief in future revenue growth.

Dividend and Analyst Consensus

If you are looking for income, look elsewhere. Lottery.com Inc. is a growth-focused company and does not pay a dividend. The dividend yield is 0.0%, and there is no dividend payout ratio to analyze. All capital is being reinvested-or used to cover losses.

The analyst consensus is as confusing as the stock chart. There is low coverage from major investment banks, but the general sentiment is highly polarized. Some technical indicators suggest a Bullish outlook, while others point to a Strong Sell. The stock price forecasts for 2025 are all over the map, with an average target around $2.5609, but some forecasts reach as high as $14.28 while others predict a drop to $0.376 USD. This tells you that no one is certain, and the risk is extremely high. You need to read Exploring Lottery.com Inc. (LTRY) Investor Profile: Who's Buying and Why? to understand the investor base here.

The market is valuing Lottery.com Inc. on its potential to capture a large share of the digital lottery and gaming market, not its current financials. If the company executes its global expansion and new product initiatives, the stock could be severely undervalued today. If they fail to achieve profitability, the stock is currently overvalued and risks falling toward the lower end of the forecast range. Finance: monitor the next earnings report (Dec 2025) for any sign of positive EBITDA.

Risk Factors

You're looking at Lottery.com Inc. (LTRY) and seeing a company in the middle of a major transformation, but honestly, the financial statements for the 2025 fiscal year tell a story of significant, near-term risk. The direct takeaway is this: the company is currently a high-stakes bet on a turnaround strategy, not on proven operational cash flow.

The core of the problem is a severe liquidity crunch and a cost structure that is simply too large for the current revenue base. This isn't a small issue; it's a matter of the company's ability to continue operating, what we call a going concern risk.

Operational and Financial Headwinds

The latest Q3 2025 filing, released in November 2025, makes this situation crystal clear. The company is burning cash, and its revenue is barely a blip against its expenses. Here's the quick math:

• The accumulated deficit-the total of all past losses-stood at a staggering $275,435,350 as of September 30, 2025.
• For the nine months ended September 30, 2025, Lottery.com Inc. reported a net loss of over $11.7 million ($11,731,597, to be precise).
• Quarterly revenue for Q3 2025 was only $137,679, which is far below the operating expenses of over $4.4 million ($4,488,506) for the same period.

This massive gap between income and expenses results in a working capital deficit of about $11.4 million, which is why management has cited recurring losses and negative operating cash flow of $6,391,548 for the nine months as raising substantial doubt about the company's ability to continue as a going concern. They are defintely reliant on external financing, like convertible notes and equity sales, which means your ownership stake faces constant dilution risk. That's a brutal reality for any investor.

External and Regulatory Challenges

Beyond the internal financial struggles, the company operates under a cloud of external and regulatory pressure. The online lottery and gaming space is highly regulated, and any misstep can be costly. Lottery.com Inc. has a history of past deficiencies and internal investigations, which continue to expose it to legal proceedings, including class action lawsuits. This kind of baggage drains resources and management time.

Also, the company has publicly stated it believes it may be a victim of illegal naked short selling and market manipulation. They've pointed to evidence like the stock appearing on Nasdaq's Regulation SHO Threshold Security List sixteen times in six months and borrow rates spiking as high as 500%. While they are investigating, this battle against alleged market actors can create extreme stock price volatility and investor distrust.

Mitigation Strategies: A High-Stakes Pivot

The company's strategy to overcome these risks is an aggressive pivot: a 'buy-and-build' model focused on diversification into sports and entertainment media. This is their lifeline.

• Funding: They have secured $250 million in committed funding to fuel this expansion, with $150 million specifically earmarked for global expansion.
• Strategic Acquisitions: They are acquiring assets like Spektrum Ltd. for technology and DotCom Ventures Inc. (which owns Concerts.com and TicketStub.com) to build out the new media ecosystem.
• Compliance: They successfully regained full compliance with Nasdaq listing rules as of March 6, 2025, which is a necessary step to stay listed.

The entire investment thesis now hinges on whether this aggressive expansion can generate enough cash flow from Lottery.com and the newly acquired assets to outrun the massive losses before the committed capital runs out. For more on the long-term vision they are executing against, you can review their Mission Statement, Vision, & Core Values of Lottery.com Inc. (LTRY).

Growth Opportunities

You're looking past the turnaround and want to know if Lottery.com Inc. (LTRY) can actually grow revenue, and honestly, the company is betting big on a rapid, aggressive expansion strategy. The direct takeaway is that their future isn't about the core lottery business alone; it's a 'buy-and-build' play into the broader digital entertainment and sports media space, backed by significant 2025 funding commitments.

This pivot is fueled by a massive $250 million in committed funding secured this year, which includes a $150 million commitment specifically for global expansion and a $100 million stock purchase agreement for acquisitions. That's a serious war chest for a company that was recently focused on compliance. They're moving fast, so you need to keep up.

Key Growth Drivers: Acquisitions and Market Expansion

The company's strategy hinges on two simultaneous expansion tracks: domestic and international lottery, plus the new Sports.com Media and Ventures division. The international push began in March 2025 with the completion of the Spektrum Ltd acquisition, valued at $1.5 million in common stock at $3 per share. This deal gives them a compliant technology platform to launch operations in dozens of international jurisdictions, initially targeting Europe, Africa, and Asia.

• Launch US operations across multiple states by end of 2025.
• Acquire DotCom Ventures (Concerts.com, TicketStub.com) for $10 million.
• Secure $10 million in June 2025 for GXR World Sports Assets to power the Sports.com Super App.

The move into entertainment and sports is a clear attempt to diversify revenue streams. By mid-2025, the Sports.com platform rollout was planned for the U.S., Europe, and the Middle East, leveraging the global appeal of sports and live events. This is a smart way to capture a wider audience than just lotto players.

Near-Term Financial Trajectory (Q1 2025)

While the strategy is aggressive, the financial results from Q1 2025 show the company is still in the investment and restructuring phase, but losses are narrowing. Total revenue for Q1 2025 was $223,849, a drop from the prior year, but the net loss narrowed significantly by 42.7% to $3.3 million from $5.75 million in Q1 2024. Here's the quick math on the bottom line:

What this estimate hides is the potential revenue acceleration from the international launches that began in March 2025. Those numbers should defintely start showing up in the Q2 and Q3 reports, but the current financials are a reminder that this is still a turnaround story, not a mature growth stock. You need to see the revenue line jump, not just the loss shrink.

Competitive Edge and Strategic Partnerships

Lottery.com Inc.'s main competitive advantage is its proprietary technology stack, enhanced by the Spektrum acquisition, which is designed for high availability and scalability across multiple gaming applications. Plus, owning the domain names Lottery.com and Sports.com gives them an instant, recognizable brand advantage in a global market that exceeds $300 billion annually.

The company is targeting the massive European lottery market, valued at $118.75 billion in 2024, with a projected compound annual growth rate (CAGR) of 6.5% through 2030. Strategic partnerships, like the one with Orange for content distribution, are key to quickly penetrating these new markets. This dual focus on technology ownership and brand recognition positions them to capture market share, but execution is everything.

For a deeper dive into who is backing this aggressive strategy, you should check out Exploring Lottery.com Inc. (LTRY) Investor Profile: Who's Buying and Why?

Next Step: Investor Relations: Publish Q2 2025 revenue guidance by Friday, focusing on the impact of the March international launch.